DrumBeat: January 14, 2008

Greenland opens to oil firms; melting ice unlocks reserves

Rising temperatures are giving Greenland the opportunity to tap into billions of barrels of oil and gas trapped under ice.

Greenland, a self-governed province of Denmark that's roughly the size of Saudi Arabia, plans to auction off rights to crude-oil and natural-gas reserves officials believe will become feasible to exploit once the ice recedes. The island is setting a delicate balance for itself as both a bellwether to environmentalists looking for evidence of global warming, and as the latest frontier for oil and gas companies.

The Spillover Effect of $100 Oil

U.S. consumers are hurting. Amid the housing crisis, a weakening job market, and spiraling inflation, consumers are facing the toughest economic climate in more than 15 years. With crude oil prices hitting the once-unthinkable $100 milestone on Jan. 2 and now hovering in the mid-$90s, overall conditions aren't likely to be helped by a modest easing in crude prices.

That's because high oil prices have an inflationary effect throughout the economy. "When the price of oil goes up, it impacts virtually every commodity, good, and service we purchase," says Terry Clower, associate director for the University of North Texas' Center for Economic Development & Research. "Everything from milk to gasoline to a bucket of fried chicken will cost more. It's a potentially scary scenario."

Suspected Nigerian Militants Attack Oil Platform Supply Vessel

Suspected militants today attacked a vessel taking supplies to an oil production platform in the Niger Delta, Felix Ogbaudu, the police commissioner in the area said.

Police are still trying to get details of the attack, including the identity of the vessel and any casualties, Ogbaudu said by telephone from Port Harcourt, capital of Rivers state and hub of the Nigerian oil industry.

Squandered oil bonanza may bring down Iranian President

Oil at nearly $100 a barrel cannot keep Mahmoud Ahmadinejad safe in the presidency of Iran for ever. Finally, it seems as if his breathtaking economic mismanagement, squandering an unprecedented bonanza, may prise him from office.

Bush discussed oil prices with Gulf Arab leaders

US President George W. Bush discussed concerns about the high price of oil in talks with Gulf Arab leaders during his Middle East tour this week, a White House official said on Monday.

Eni loses grip of Kazakh oilfield

Eni, the Italian oil company, is to lose operating control of the giant Kashagan oilfield, the crown jewel of its upstream portfolio, as Kazakhstan asserts greater control over the troubled oil development.

‘Euro open credit lines used to buy oil’

Iran is using open credit lines settled in euros to finance fuel imports after some international banks stopped guaranteeing its deals due to US pressure, an oil industry source said yesterday.

French banks BNP Paribas and Calyon stopped offering letters of credit (LCs) last year for oil sales to Iran because of political pressure from the United States over Tehran’s nuclear programme, industry sources have said. Without the LCs, Indian refiner Reliance halted sales of gasoline and diesel to Iran. But other sellers continued to deliver fuel to Iran using the open credit lines, the industry source said yesterday.

Shell says oil sands upgrader back to normal

Royal Dutch Shell Plc's oil sands upgrading plant near Edmonton, Alberta, is back at normal operating rates following repairs to one of two production trains damaged in a Nov. 19 fire, a company spokesman said on Monday.

Iraq oil workers: New labor law needed

Iraq's top oil workers' union has asked for action on a draft labor law, as called for in the constitution, in a letter to Iraq's labor minister.

This marks the year's first movement by workers in Iraq's most important sector to demand better working conditions; demands led to upheaval throughout 2007.

Gaz de France signs partnership deal with Qatar

Gaz de France on Monday said it has signed a long-term partnership agreement with Qatar Petroleum International and the country's authorities.

"This memorandum of understanding plans the development of cooperation between the two groups at an international level, in particular in the areas of exploration-production, liquefied natural gas (LNG), gas storage and downstream activities," Gaz de France said in a statement.

Virgin Atlantic to fly a 747 plane on biofuel

Virgin Atlantic said Monday it would fly one of its Boeing 747 planes on biofuel during a demonstration flight from London to Amsterdam next month.

Virgin Atlantic Chairman Richard Branson said the test flight, which he called the first of its kind, would yield crucial information on how to reduce aviation's carbon footprint.

Venezuela energy clients subject to Chavez whims

Venezuela's decision to halt asphalt exports and unilaterally change oil payment terms are new signs that the OPEC nation's energy deals can at any moment be upended by the whims of leftist President Hugo Chavez.

The former soldier on Sunday said Venezuela would cut all asphalt exports to improve domestic infrastructure, just days after Venezuela announced it was cutting the payment time for oil cargoes to eight days from the industry-standard 30 days.

Shell: Force majeure on Nigeria Forcados exports

Royal Dutch Shell has declared a force majeure on crude shipments from its Forcados export terminal in Nigeria after last week's pipeline attack, a spokesman said on Monday. Exports have been halted since Friday due to sabotage at two of its pipelines connected to the Forcados export terminal. Production has not been affected, the spokesman said.

Bush Delivers Arms Sale to Saudi Arabia

President Bush, on his first visit to this oil-rich kingdom, delivered a major arms sale Monday to a key ally in a region where the U.S. casts neighboring Iran as a menace to stability.

...Coinciding with Bush's trip, the Bush administration in Washington notified Congress on Monday that it will offer Saudi Arabia the chance to buy sophisticated Joint Direct Attack Munitions - or ``smart bomb'' - technology and related equipment, the State Department said. The administration envisions the transfer of 900 of the precision-guided bomb kits, worth $123 million, that would give the kingdom's armed forces highly accurate targeting abilities.

How to handle carbon dioxide? Lock it in rock

About two months from now, three narrow wells will plunge thousands of feet through the industrial scrubland of southeastern Washington state, reaching for a solution to the expected crisis through a natural volcanic formation created in the distant past. Within that thick layer-cake of basalt rock, liquefied carbon dioxide — which would otherwise accumulate as a major greenhouse gas in the atmosphere — will begin taking the place of brackish water. And if all goes well, that pressurized carbon will gradually mineralize into limestone, trapping itself forever within the vast underground prison and assuming a major role in the fight to ward off a future environmental catastrophe.

In the Farm Bill, a Creature From the Black Lagoon?

IT may not surprise you to learn that much of the pork and chicken and beef and milk that you buy at the grocery store comes from huge, industrial-size operations that bear little resemblance to the quaint family farms that adorn many food packages.

But you may be surprised to learn that your tax dollars have helped pave the way for the growth of these livestock megafarms by paying farmers to deal with the mountains of excrement that their farms generate. All of this is carried out under the rubric of “conservation.” Congress is about to renew the program — and possibly even expand it — as part of a new farm bill wending its way through the Capitol.

70-dollar mark for oil is ‘realistic’ : Sarkozy

Before rounding off his visit to Saudi Arabia and arriving in Qatar, French President Nicolas Sarkozy told reporters in Riyadh that a 100-dollars-a-barrel is too high a price for oil, suggesting that a ‘realistic’ price is 70 dollars.

‘When the price of oil increases three-fold in four years to reach 100 dollars per barrel, I feel perturbed about the nature of such increases,’ said the president, who questioned the effects of the rocketing cost on purchasing power and on poorer nations with a shortage in alternative energy resources.

‘We believe that the realistic price for oil should be 70 dollars,’ he added.

Kunstler: Disarray

A reader sent me a passle of recent clippings last week from the Atlanta Journal-Constitution. It contained one story after another about the perceived need to build more highways in order to maintain "economic growth" (and incidentally about the "foolishness" of public transit). I understood that to mean the need to keep the suburban development system going, since that has been the real main source of the Sunbelt's prosperity the past 60-odd years. They cannot imagine an economy that is based on anything besides new subdivisions, freeway extensions, new car sales, and Nascar spectacles. The Sunbelt, therefore, will be ground-zero for all the disappointment emanating from this cultural disaster, and probably also ground-zero for the political mischief that will ensue from lost fortunes and crushed hopes.

Nissan exec: Car culture is fading

Worldwide, people are losing interest in automobiles, one executive says.

Maersk suspends shipping to Nigerian oil service port

Danish shipping and oil group A.P. Moller-Maersk said on Monday it had suspended all shipping to the Onne port in Nigeria due to security concerns.

Onne is not an oil export terminal but is used to supply oil industry contractors and ships that service the offshore sector. It is near the oil hub of Port Harcourt where a tanker was attacked in Friday

Repsol Confirms Natural-Gas Find in Peruvian Jungle

Repsol YPF SA , Spain's largest oil producer, confirmed an ``important'' natural-gas discovery in Peru's southeastern jungle, Peru's President Alan Garcia said.

Repsol, based in Madrid, and partner Petroleo Brasileiro SA, which announced the find last month, discovered more than 2 trillion cubic feet of gas in Block 57 bordering the Camisea gas fields where Repsol is a partner, Garcia said.

``This important gas find will represent millions of dollars in income for Peru,'' Garcia told reporters in Lima today. ``It will enable us to be self-sufficient in fuel.''

Fate of oil unites feuding Iraqi factions

Several Shia and Sunni political factions united yesterday to pressure Kurds over control of oil and the future of the city of Kirkuk, which Kurdistan wants to annex to its self-rule region in the north.

The budding front, which includes one-time enemies such as Shia cleric Muqtada al-Sadr and former Prime Minister Ayad Allawi's secular faction, believe the country should have a strong central government.

In contrast, the Kurds and the Supreme Islamic Iraqi Council, a major Shia party, have championed a federal system that would give a limited role to the national government and greater powers to the regions.

Energy Sector Stunning Demand and Production Trends & Developments

While we did not see triple digit crude oil prices in the futures market last year we remain optimistic the energy sector will perform well in 2008. Growing global energy demands will continue to present challenges to the market.

Several graphics we ran across last month illustrate the major issues in the energy sector. The chart at right from an article in the Financial Times illustrates that the use of fossil fuels has correlated very closely with economic growth over the last 185 years.

Canada: Fuel shortage drying out Inuvik gas pumps

Gas station owners in Inuvik, N.W.T., are rationing their fuel this week, as petroleum supplier Imperial Oil does not have enough to keep everyone in the Arctic town running until the next annual shipment arrives by barge.

Blaming shipping delays last fall, officials with Imperial Oil have told local businesses to ration fuel so that supplies are available for essential services, such as home heating, aviation and transportation.

Zimbabwe: Power Cuts Fatal Blow to Ailing Health Sector

SHEILA Moyo (not her real name) remembers with fondness the elderly woman who assisted her during childbirth each time she looks at her bouncing baby.

Moyo (27), gave birth at night near Glenview Polyclinic on 31 December, with the assistance of the stranger who appeared from "nowhere" to rescue her.

The young woman, who was in labour, had been turned away from the clinic after nurses decided that without electricity, it would be impossible to help her deliver.

...They said they would have swung into action if she had brought the three candles required to light up the clinic during a blackout.

Russia: Demonstrations Continue Amid Energy Crisis In Dagestan. Investigation Launched

Thousands have taken to the streets of the Dagestani capital, as widespread power outages continued across the region. As the Kavkazsky Uzel (Caucasian Knot) Information Agency reported, demonstrators blocked traffic in the city center, and built barricades, even as temperatures reached negative 15 degrees Celsius.

Idiotic U.S. policy muddies answers to energy crisis

There are no magical answers and there is no cheap solution for our energy problems. But there are considerations that haven’t received a fair chance or enough press coverage.

John Hofmeister, president and CEO of Shell Oil Co., has said repeatedly that there are plenty of oil and gas reserves sitting in the Outer Continental Shelf off the American coast. Yet the oil and gas business doesn’t have access to that oil nor do we.

China´s installed capacity soars

Hu Zhaoguang, an Expert said "700 gigawatts means China is the second largest power producer in the world. The installed electricity generating capacity in the United States was more than 900 gigawatts. The newly added capacity last year alone was equivalent to more than all of Britain's power stations."

Currently, the majority of the capacity is fueled by coal, which supplies more than three quarters of the country's electricity. Water-generated power accounted for 20 percent of the whole. Other clean energy including wind power and nuclear power generating capacity has seen great development but still accounts for less than 2 percent of the total.

China still building "energy-guzzling" buildings

China's developers are still building "energy-guzzling" buildings, flying in the face of sustainability pledges made during their design, state media reported on Monday.

China, facing an uphill battle to secure energy and resources to feed its booming economy, has set targets to make new buildings 50 percent more energy efficient by 2010.

But only 53 percent of China's new buildings had met national energy conversation standards, the China Daily said, citing a construction ministry survey which blamed cost-cutting developers.

Russian assets in France frozen over dispute with Swiss firm dating to early 1990s

Bank accounts of Russian government-linked bodies in France have been frozen over a legal dispute with a Swiss firm dating back to oil-for-food deals at the end of the Soviet era, a Russian official said Monday.

Russia's Foreign Ministry issued a formal complaint to France over the seizure, Russia's state-run news agency RIA Novosti reported.

South Africa: Eskom invites bids for nuclear power

Eskom has asked two international nuclear giants to submit bids to build SA’s next nuclear power station, the Cape Times reports on its website today.

The new plant, twice as powerful as Koeberg, would be the first of five or six more nuclear plants that Eskom is planning to help solve the country’s energy shortage.

Turning Waste Heat into Power

Silicon, in the form of photovoltaic cells, is good at generating electricity from sunlight. New research shows that it could also make a good thermoelectric: a material that converts heat into electricity and vice versa. Since silicon is more abundant than the leading thermoelectric materials and has a vast manufacturing infrastructure behind it, it could eventually yield cheap devices for generating power from engines' waste heat or from solar heat.

Malaysia's palm oil inventory to fall further as output drops, demand increases

Malaysia's palm oil inventory will drop further over the next few months after a slight fall in December as severe flooding hits key producing states, analysts said Monday.

Indian taxes a roadblock in biofuel drive

India's policy of blending ethanol with petrol to cut its dependence on costly imported crude oil and support ailing sugar mills is being hobbled by a web of taxes, a leading biofuel producer said on Monday.

Should cars eat our food?

It is not sinful to fuel autos with the help of renewable crops, as Cuban dictator Fidel Castro claims. But it is unacceptable to make food scarcer and more expensive because of a headlong race by businessmen to make higher profits with such a programme.

Thailand: PTT says biodiesel supplies are secure

PTT Plc and Bangchak Petroleum Plc have insisted their B2 and B5 biodiesel blends will not be affected by the looming palm oil shortage and price hikes due to their secured supply of raw materials.

Malawi to increase fuel storage

Malawi plans to increase fuel storage facilities to keep in reserve fuel for up to 21 days, Minister of Energy and Mining Henry Chimunthu Banda has confirmed.

...This follows the current persistent shortage of fuel in Malawi. Other reports indicate that Malawi fuel were destined to Zimbabwe to abate the country’s fuel crisis and the rationing between the two countries was a major contributing factor to the shortage.

Rethink biofuel, says Nobel laureate

Dr. Hartmut Michel, the 1998 Nobel Prize winner for chemistry, who was in Manila last week for a talk, said investing in biofuel development was “counterproductive.”

“When you calculate how much of the sun’s energy is stored in the plants, it’s below one percent,” he said at a forum at the Philippine International Convention Center in Pasay City on Wednesday.

EU admits biofuel target problems

The European Commission is re-thinking draft rules on reaching the EU's target to boost biofuels amid strong criticism by green campaign groups and development NGOs that the goal could lead to environmental damage and social dislocation.

General Motors finances ethanol maker Coskata

General Motors (GM) says it is investing in a fledgling company that claims its secret process could be able to make ethanol from waste in large quantity as soon as 2010 for $1 a gallon or less, half the cost of making gasoline.

Bill Roe, CEO of 18-month-old ethanol maker Coskata, says the company's process uses bacteria developed at the University of Oklahoma and existing gasification technology to generate 99.7% pure ethanol, plus water. He says the method should leapfrog cellulosic production, which has been seen as the next step from today's ethanol production using corn.

GM won't disclose its investment, but Roe says it's enough to make Coskata "a speed-to-market play. I don't think most people saw this coming," he says. "Most talk about cellulosic ethanol is futuristic."

Saudi to Keep Asia, Europe Crude Sales Steady in Feb

This is the fourth month in a row that the oil kingdom supplies full volumes to Asia.

In Europe too, the allocations for February were unchanged from January levels, officials at two European refiners said.

"It is the same amount as January. There were rumours they could allocate a little bit more, but there is no improvement," a source in one refiner told Reuters.

...Lifters around the region had largely expected Saudi crude allocations to hold steady despite the surge in oil prices to above $100 earlier this month.

Refining sources said last week they had little need and ability to process additional heavy sour crude, which makes up much of Saudi Arabia's spare capacity.

Oil prices may fall on speculation supplies will rebound, survey shows

Crude oil may fall this week on speculation that US refineries will increase stockpiles after cutting supplies in December to lower tax payments.

Twenty-one of 39 analysts surveyed, or 54%, said oil prices will decline through January 18. Nine of the respondents, or 23%, said futures will increase, and nine predicted little change. Last week, 52% of respondents said oil would rise.

Get ready for $400-a-barrel oil

Last week, the price of oil reached $100 a barrel. This came as a surprise to some people, but it should not have done so. The world is running out of oil, and no amount of wishful thinking can change this fact.

A recent book by David Strahan predicts the price will quadruple to $400 a barrel within the next five years.

Analysis: Will new energy law deliver?

Proponents of a major piece of energy legislation signed by President Bush last month say the new law will lead to huge energy savings and increased national security, but not everyone's convinced it will pan out as promised.

Ford counts on spruced up F-150

On Sunday, when Ford pulled the sheets off its new F-150, it did so in a market in which pickup sales are dropping, hit by high gas prices and a weakened housing sector that makes both homeowners and contractors wary of big purchases.

Still, the struggling automaker hopes the bolder look and enhanced features of its new truck will help convince reluctant customers that now is the time to buy.

It could be a tough sell, but it's something Ford needs to do to meet its goal of being profitable in 2009.

Toyota Will Offer a Plug-In Hybrid by 2010

The Toyota Motor Corporation, which leads the world’s automakers in sales of hybrid-electric vehicles, announced Sunday night that it would build its first plug-in hybrid by 2010.

The move puts Toyota in direct competition with General Motors, which has announced plans to sell its own plug-in hybrid vehicle, the Chevrolet Volt, sometime around 2010.

Norway faces challenges as oil production no longer grows

Norway has to prepare for a shift from being a major oil producer as production is no longer growing, Petroleum and Energy Minister Aslaug Haga said Monday.

At a joint briefing about the 2007 oil and gas year, director Bente Nyland of the Norwegian Petroleum Directorate noted that oil production on the Norwegian continental shelf in 2007 was slightly lower than in 2006 while gas production increased.

Eni Yields To Kazakhstan

After months of protracted negotiations, a deal on the future of the Kashagan oil fields was finally hashed out in Kazakhstan on Sunday night, leaving a raft of oil majors with a smaller stake but still at least a place on the coveted project.

The consortium, led by Italian oil firm Eni, had agreed to give equity stakes in Kashagan to state-owned energy firm KazMunaiGaz after meeting with Kazakh Prime Minister Karim Masimov.

Bin Laden turns heat on Saudi Arabia

The latter operations would be staged in the hope of forcing Washington to a Hobson's choice between standing back and allowing havoc to reign in the world's oil market - with the immense damage it would entail for the US economy - and ordering US military forces into action against Muslims in order to restore oil production on the sacred soil of the Prophet Mohammad's birthplace and what bin Laden refers to as "the land of the two holy mosques".

EADS chief looks to US to avoid euro 'torture'

Mr Gallois can be thankful that the first A380s are at last flying Asian skies. The assembly lines are running smoothly, if two years late. Yet Airbus still has only 177 firm orders. The break-even level is 420. Bad luck has played its part. Oil at $100 a barrel has given an edge to Boeing's super-light, composite Dreamliner. Even so, the concept of a hub-to-hub giant may have been flawed in a world where travellers prefer point-to-point. Will the A380 prove an illustrious flop, like Concord?

China eyes energy, environment ministries in March

China will likely get an energy ministry in March and upgrade its environment watchdog to ministry status, sources said on Monday, as it aims to boost fuel security with oil at $100 a barrel and cut back on pollution.

Swedish Alliance Party Calls for Nuclear Rethink

Sweden should rethink its commitment to phase out nuclear power and build four new atomic plants in the next few years, the leader of one of its ruling, centre-right alliance parties said on Friday.

Peak Oil with Matt Simmons

You may recall us speculating about a correction in oil. Our back-of-the-envelope calculation is that there may be as much as US$30 of geopolitical and fear premium in the price. But the market price is what is. It reflects what investors know at any given moment. And we are certainly open to the possibility that on the supply side, news from the oil market is grim.

Matt Simmons, one of the leading proponents of Peak Oil (the idea that global oil production has peaked at about 85 million barrels per day), says don’t count on off-shore exploration to make up for the exhaustion of the big elephant fields that make up the bulk of today’s production.

Survey: Average gas price rises to $3.07

The national average price for gasoline rose nearly 10 cents over the last three weeks, according to a survey released Sunday.

The average price of regular gasoline on Friday was $3.07 a gallon, mid-grade was $3.19, and premium was $3.30, oil industry analyst Trilby Lundberg said.

China's 2nd largest oil field produces 27 mln tons crude oil

Crude oil output at China Petrochemical Corporation (Sinopec)'s Shengli oil field in 2007 stood at 27.708 million tons, surpassing its annual target, said Sinopec on its website Monday.

Shengli, located in eastern Shandong Province, is the country's second largest oil field after the northeastern Daqing oil field.

From The Martian Desk

BIOFUEL DISASTER IN THE MAKING. Both Michael Doliner and Martin Murie address once again the tragedy of the commons that is upon us in the form of misguided, profit-driven energy policies. Congress, before going into recess last month, passed a bill signed into law by the president (The Energy Independence and Security Act of 2007), which mandates that the U.S. produce 36 billion gallons of biofuel annually by the year 2022. I've repeatedly broached that issue. (See, among many articles of mine, "Deceitful Solutions To America's Energy Dependence," March 2007.) I won't repeat the case I made last year and you can read Michael and Martin's pieces for their take on the matter, but I'd like to bring your attention to a statistical analysis made by Stuart Staniford in "Fermenting the Food Supply" (The Oil Drum, January 7, 2008). According to Michael, Staniford is "one of the best researchers on peak oil." His paper shows the correlation between the prices of oil and ethanol, the plateauing of oil production (the world is consuming more oil than it can replace through new discoveries...aside from the consequences of burning fossil fuels on the global environment), and the direct relationship between these so-called "renewable energies" and starvation in the poor world.
Also: Clinton And Obama On Iran And Biofuels

EU members braced for emissions targets

EU members are bracing for proposed greenhouse gas emission targets due next week as they fret over how much of the burden they will have to bear in the fight against climate change.

The European Commission on January 23 is to unveil plans for individual targets for member states on how much they need to cut their carbon dioxide emissions in the coming years.

For those following rail projects. Arlington's Columbia Pike system gets some funding to move forward


"It is one of the most important things we can do to move people in Northern Virginia and deal with air pollution and global warming," said Authority Chairman Chris Zimmerman, who also is a member of the Arlington County Board.

Ed Tennyson, who collaborated with Laurence Aurbach and me on the Millennium Institute project, prepared a list of viable Urban Rail projects (@ $30/barrel oil) in the DC area. He had Columbia Pike on the list, but it went from the Pentagon/Crystal City to Tyson's Corner.

Best Hopes for Urban Rail,


I remember commenting on that. The Pentagon to Skyline segment will happen in the near term (This is the Columbia Pike Corridor). The Skyline to Seven Corners to Tysons expansion is little more than a glimmer in someone's eye at this point.

The road-builders are trying to fight it too.

It would be nice to get it out to Tysons, but we are already looking at getting Metrorail out to Tysons, and while the details are far from optimal, it is a lot further along in the planning process (they are on the verge of starting some of the utility relocation, actually). In the long run, I imagine that they could link it up with a Metrorail station somewhere in the area, and have a nice connector between two Metrorail stations.

From memory, Ed had quite the rail hub @ Tysons Corner.

The Silver line through to Dulles and then Leesburg (subway/Rapid Rail)

Columbia Pike terminus (Light Rail)

Virginia Beltway terminus (Light Rail)

Purple Line extended from Bethesda MD to Tysons Corner (new terminus, Light Rail).

Three Light Rail termini and one through WMATA line, for five "spokes"

A way to get around "The Beltway" and avoid going through central DC.

Visionary, yes. Worthwhile, YES !

Best Hopes for doubling Urban Rail pax-miles in DC area,


NYT to JHK: You wuz right

Of course, that is not what the headline says, but in effect, that is what the following excerpt says.

Americans Cut Back Sharply on Spending
Published: January 14, 2008

“We are seeing a correlation with housing prices,” said Michael O’Neill, a spokesman for American Express. “The falloff in spending is everywhere in the country, but it is greatest in those areas like south Florida and California, where home prices have fallen the most.”

The big exception is gasoline. American Express and the Consumer Federation of America say that consumers are buying just as many gallons as ever, but paying more for them, and that has forced cutbacks in other purchases. Gasoline prices usually drop after the summer driving season, but this year they shot up, from $2.85 a gallon on average in September to $3.07 in December and $3.15 in the first week of January.

A similar trend is evident in the cost of natural gas, electricity and home heating oil. “We built these big houses in the suburbs, which need a lot of energy to stay warm and a car to go shopping,” said Stephen Brobeck, executive director of the Consumer Federation. “And we can’t change that quickly.”

Could it be, is it even possible?? We've been told over and over that the increase in the price of oil and products won't have much impact on the American consumer. Looks like those economists were wrong and we are going to have a "just in time" recession. That is, just in time for the November election.

E. Swanson

Supposing the Democrats win, with Clinton and Obama the USA is still firmly on track to WWIII. Clinton claims "Putin has no soul". I guess the hunting season on Russian "coons" is now open and the retards that run the USA think it's going to be a cakewalk. Much like Hitler and Napoleon. Must be a western mental disease.

This is an oil/energy board, not a showcase for political spam.

I saw a news story on TV about this last night. What seemed to really be worrying the talking heads was that rich people were cutting back. In previous years, the poor and middle class cut back, but luxury sales did well, and the economy kept chugging along. This year, stores like Tiffany's and Saks didn't do well. Rich people are now having to choose between the new plasma TV and the Tiffany jewels, while in previous years, they'd buy both.

Part of the downturn in spending by wealthy people may be the "Cheap is the new chic" trend.

Conspicuous consumption may increasingly be viewed as not only not good for the environment--but perhaps physically dangerous as well.

That doesn't explain why the wealthy are suddenly having trouble paying their American Express bills.

For the wealthy, I wonder what fraction of income is either bonus, commission, or dependent on the stack market or other investments, and what fraction is straight salary. As some parts of the wealthy cut back, others will also see their incomes drop and will be obliged to follow suit.

Hey -- on the bright side -- we may finally understand how "trickle down economics" actually works.

Most wealthy depend on the purchasing power of the middle class to support their lifestyles. A weaker middle class means less rich people. Plain and simple.

"Wealthy" is in the eye of the beholder. It's really not very hard to get an Amex card, especially for recent college graduates. Also, in a deflationary period, you "make" money by postponing discretionary purchases--because the price tends to drop with time.

Any way you slice it, IMO the discretionary spending side of the economy is not the place to be. Unfortunately, that's probably where the majority of the jobs in the US are located.

CNBC is reporting that the number of Citibank job layoffs will be in the range of 17,000 to 24,000.

I know, I have an Amex card. (Never use it, though.)

But the article you posted said well-off Amex users were having trouble paying their bills.

I think that the writer defined Amex cardholders as well-off, and then noted that delinquency rates are increasing. The average spent per card is $12,000 per year, but I'm sure that the median would be a lot less. And a lot of the $12,000 number reflects reimbursed business expenses. I suspect that the bulk of the delinquencies are among younger card holders, especially among those still trying to hold on to a house.

In any case, a lot of people who lose their homes are actually going to see an increase in disposable income, assuming that they in most cases move in to less expensive rental units--as long as they still have their jobs, which might be a temporary situation.

From the NYT article:

At the same time, the number of overdue payments on American Express cards is surging, the company said — and this among well-heeled cardholders who charge up to $12,000 a year, on average, on each card. American Express has called some cardholders in the last few weeks to ask if they will have trouble paying their bills.

Hah! $12,000 a year on an AMEX card is chump change for some people.

I happened to have been visiting my older cousin last year, who is now retired from a fairly high-level corporate position in comsumer products marketing. He and his wife are totally addicted to the affluent life style ..... big house, two later model luxury cars, expensive restaurants, exotic vacations, the works.

I was staying overnight to attend a funeral the next day, and the spare room I was given to sleep in was sort of a part-time office and storage room. I couldn't help but notice an AMEX bill on the desk cluttered with other papers. My curiousity got the best of my, and I looked at the bill and was shocked to see a $11,300 balance. Only something like $3,500 was a carried-over balance from the preceeding month, which means that during the billing month my cousin and his wife managed to rack up almost $8,000-worth of charges. In addition to $3,600 to some travel agent, there was about $700 for wine (he's a wind snob, also), almost $900 on restaurants, and all sorts of charges at expensive women's clothing stores.

Now, the thing is that my cousin and his wife also have other credit cards, so lord knows what their total credit card charges were for the month. These people cannot conceive of living any different way, humor me when I discuss the energy situation, and are going to get hit smack between the eyes should the economy fall apart.

Hopefully your cousin doesn't find out you were snooping through his underwear drawer-you will have to spring for a hotel room.

Along those same lines, my wife and I were kind of suprised at the financial situation of our house's previous owners. Having gone into the sale knowing how much they had bought the house for, $180,000, and how much they were selling it for, $340,000, we thought they would be taking home a pretty decent chunk of change. Instead, they had to come to the table with another $40,000 to meet the mortgage and home equity loan balances. On top of that, they left a few recent credit card bills in the house that added up to over $20,000. Somehow, they had burned through $220,000 in a little more than 10 years.

My perception is that Amex is used for more corporate accounts, but I've no data to back that up. If it were true the implications would be interesting.

My wife used her Amex card to fuel a 737 when the pilots had 'forgotten' the company cards some 20 years ago -- another time she racked another $20K in a single shot for a promotion when the company had likewise 'forgotten' that things needed payment ;-)

Speaking of Citibank...

China may block $2B Citi deal - report

Opposition from the Chinese government may stop Citigroup Inc.'s plan to raise capital by selling a stake worth $2 billion to a Chinese bank, The Wall Street Journal reported on its Web site Monday.

You can put the fork in Citi. It is done.

In general, the Chinese are interested in buying US assets (what else are they going to do with all the incredible shrinking dollars they hold?). However, Chinese banks have their own issues with having bailed out failing inefficient Communist industries. My guess is the Chinese leadership is concerned about a troubled Chinese institution taking over a troubled American one. Would that BoA had been so prudent.

I see the China-US economic relationship comparable to the Japan-US relationship in the 1980s. The Japanese started buying up US assets and some feared that eventually they would own the entire country. Then around 1990 the commercial real estate market tanked due to one of Papa Bush's recessions and it brought the Japanese economy down with it. Even 0% interest rates failed to stimulate the Japanese economy. Could the Chinese be falling into a similar trap as the US home real estate market tanks?

The Japanese bought real estate, I think in something of an ostentatious show. When real estate dropped, the Japanese had to sell out at a loss. I think the fundamental problem was arrogance.

The Chinese don't seem to be making the same mistake. They seem largely to be buying financial institutions (e.g. stake in NASDAQ). If our financial industry collapses, as it may, the way real estate collapsed, the Chinese may be sorry they ever bought in. But I think we'll be even sorrier.

A minor correction, I believe.
Reagan cut the support for the dollar in 87. It dropped from 250 yen / $ to 140 yen/$ in 3 months. I couldn't sail out fast enuf. Meanwhile the Japanese people were being told that their market investments were better invested in US real estate, These were the days when Americans thought Japan was going to buy America. Well, lo and behold, they were driving the real estate market up since Japanese don't like to haggle over price. Then Japanese home real estate bubble collapsed and so did their stock market. Sound familiar?
Then when their brokers called them on margin, they had to dump the real estate, at massive loss. Then of course they got killed on the exchange rate. A veritable Greek trajedy. The seeds of your own downfall are sown in your own faults. In this case greed or hubris.
Will the Chinese and Arabs fall for the "Japanese" treatment? Let's see who has learned the lessons of history now.


Reagan cut the support for the dollar in 87. It dropped from 250 yen / $ to 140 yen/$ in 3 months.

It was the other way around, The Japanese stopped supporting the dollar as Trade deficits grew. They dump US treasuries sending the Yen soaring. But when the Japanese market crashed, and exports to the US shrank the started selling the Yen and buying dollars. They been doing this ever since.

This January Atlantic article by James Fallows is an interesting read on the US/China relation. No paywall.

They didn't say that black cards are defaulting.
Anyone can get the regular AMEX cards and they are not even a desirable card to have. AMEX is notoriously bad with merchants as far as excess charges and many will not accept the card.
They also have a lot of credit default exposure.
Visa and MC are just servicers, their only exposure is to a downturn in volume but they are a gold mine for now as they have zero exposure to credit risk.

"Anyone can get the regular AMEX cards and they are not even a desirable card to have."

Might want to be careful the sweeping statements. AmEx is THE choosen card amongst travelers due to their fast dispute resolution processes, highly detailed analysis of expenses on the statements as well as many other features (e.g. insurance, rewards programs) Yes, they are generally more expensive to the merchant on the backend (3% vs 2% for MC/Visa), but as a consumer (not a merchant) you get what you pay for. Since I pay AmEx $100 a year for the card they take care of me not the merchant. AmEx rewards for example in my experience are some of the best points to have - much better than Airlines or even hotel programs.

If your objective is a cheap buy you might get there with Visa and MC. However, since the companies offering MC/Visa accounts are always driving you to carry a balance so they can get more money I would say that the conflict of interest leaves the AmEx as the most user friendly of the cards available. Since they don't plan on you carrying a balance - I'm not referring to the Blue card or the like as these are just a MC/Visa with a higher fee.

It comes down to perspective, but at the end of the day you get what you pay for. A free card is seldom free, just as 0% interest often doesn't work out to 0%...

I have no debt (no house either) but I use AMEX exclusively due to insurance, downloads and due to the exorbitant fee access to the Delta Crown Room. I use it primarily for business and I am not dissatisfied.

I use a business Master Card from Chase that pays me 3% rebates in cash, never had a problem with them in more then 20 years, and don't have to worry about some merchants not taking the card.
I pay the balances in full every month so it doesn't cost me anything.

I get the AMEX offers in the mail all the time, but why change from something that works.

Many years ago I had a dispute with AMEX, and while eventually I prevailed they wasted a lot of my time, so they aren't always as good as you say.

I know how it goes though, the daughters have the AMEX cards and think they are "cool", they also drive the fancy German cars while I ride a 40 year old motorcycle.
Maybe that's why they are always asking for money. LOL.

Half the "wealthy" are probably anything but. They have high salaries, large houses, many luxuries and large and mounting debts. Considering the downturn in real estate, some "wealthy" may even have net negative worth. The real estate bubble led many, rich and poor, to live beyond their means.


Another, and perhaps more plausable, explanation: In times of a general economic downturn citizens (consumers to TPTB) tend to put off purchases because of expectations of more depression in prices.

But, that would would not answer Leanans question of why 'wealthy' citizens are not paying their credit card bills. Of course many of the wealthy became that way by avoiding paying what they owe...Or, maybe the wealthy are avoiding payment in hopes of a government bailout for 'wealthy card holders that were tricked into paying usererous rates by nefarious credit card companies.' The wealthy could hire a staff of good lawyers and bring a class action suit against some of the card issurers. What a wonderful distraction that would be for the MSM to air. 'Clebrities sue credit card issuers' over loss of their fur coats, Bentleys, and thousands of pairs of shoes!' :)

The important question is what are the really wealthy going to do when it becomes obvious we are collapsing? Are they going to give up their wealth to try to mitigate the crisis and minimize the suffering of their fellow humans? Or will they just try to wall themselves in their compounds and maintain their lifestyles as long as possible. If the latter, which is what I expect, then we are totally screwed.

Are they going to give up their wealth to try to mitigate the crisis and minimize the suffering of their fellow humans?

Dang it, SolarDude! You made me spew tea all over my keyboard.

We, who can afford to sit here typing on computers, are the wealthy, and most of us aren't "giving up our wealth to minimize the suffering of our fellow humans." I don't see how that is going to change in the future. Except the number of "wealthy" will keep shrinking.

I expect we will become more and more like a Third World country, with some very rich, a lot of very poor, and not much of a middle class.

Very perceptive and well said (Para 1)

Don't know if I agree with para 2. IMO+experience, as long as you are willing to do reasonable work there is plenty of opportunity in America. If you are also willing to live somewhat conservatively, you will also accumulate some wealth.

Its likely the Wealthy got caught in the Housing bubble like everyone else. They upsized their homes and poured capital into Hedge funds investing in risky investments. Hedge fund redemptions are up, and a significant number of funds are now blocking investors from widthdrawing. Say for instance your savvy Rich investor that poured millions into hedge funds and now your unable to withdraw your money. Would you continue to spend, or cut back? When the dust settles, some rich folks won't be rich anymore.

Is this a big story or not?

"The department's Inspector General Gregory H. Friedman and his auditors found that in 28 percent of the oil transfers they examined, the amount received did not match the estimated amount to be shipped by the Interior Department's Minerals Management Service.

"To illustrate our findings regarding discrepancies, during a four-month period in Fiscal Year 2005, two Department contractors reported receiving 308,000 barrels of royalty oil less than the amount that MMS had scheduled for delivery to the market center. Yet, despite this significant shortfall, the Department took no action to resolve the discrepancy and to ensure that it had received all of the oil shipped by MMS," according to the audit."


I just figured someone in the government was stealing oil. We've become a corrupt, crony-capitalist state. The government's primary function is no longer to provide for the common welfare, etc.; it is to make a few people rich. No bid contracts for services that were never rendered do that just fine. So does siphoning off oil destined for the strategic reserve.

On the other hand, it could just be incompetence.

Yeah - corruption or incompetence, it's a toss up anymore.

Too bad we never seem to have anyone who tries to be corrupt, but is incompetent at it.

But mass incompetence fosters corruption.

People get caught all the time at embezzling, fraud, etc, those that happen to not be very good at it. Mastery and competence takes practice.

When I lived in South Louisiana in the early 1980's there were rumors circulated by the locals of salt water being offloaded from crude oil barges into the caverns at the Hackberry SPR. I personally have no knowledge of this activity but the rumor was widely known locally.

Yes indeed JHK is right, More evidence on Mish

Monday 14th item
Credit Card Time Bomb Is Ticking Away

Sunday 13th item
Housing gridlock: Trapped in Suburbia

"Anyone who thinks this blows over in 2008 is in fantasy land. Payback for the unsupported boom we experienced is just in the second inning. A severe recession is coming that has not yet hit full force."


Apologies if previously posted

I could almost imagine a headline in The Onion:

Americans decide they have enough junk, economy collapses.

No Quick Fix to Downturn...NY Times...


...snip...'With a wave of negative signs gathering force, economists, policy makers and investors are debating just how much the economy could be damaged in 2008. Huge and complex, the American economy has in recent years been aided by a global web of finance so elaborate that no one seems capable of fully comprehending it. That makes it all but impossible to predict how much the economy can be expected to fall before it stabilizes'...snip...

'some economists think a recession may have begun in December. In the last two weeks, there have been signs that a substantial downturn may already be unfolding. The Labor Department reported a sharp slowdown in job creation in December. Retailers said that sales last month were extremely disappointing, capping the worst gain for a holiday season in five years. A widely watched index showed manufacturing slowing, despite a weak American dollar that has encouraged growth in exports'...snip...

'There is still a long way to go,” said Nouriel Roubini, an economist at the Stern School of Business at New York University and chairman of the research firm RGE Monitor'...snip...

'“We’re facing the risk of a systemic financial crisis,” Mr. Roubini said. “It’s not just subprime mortgages. The same kind of reckless lending has been occurring throughout the financial system. And it’s not only mortgages: Now it’s credit cards and auto loans, where we see problems increasing. The toxic junk is popping up everywhere.”...snip...

'“Firms will go to great lengths to hide or delay reporting losses,” said Paul Ashworth of Capital Economics. “What we know now therefore might only be the tip of the iceberg.”...snip...

And it causes a subsequent collapse of the economy in China, the source of most of our junk.

Most are unaware that Chinese exports to the USA ( as a % of total Chinese exports) have fallen to 19% and continue to decline. I would not be surprised to hear comments indicating Chinese dependency on the USA when this number falls below 10%.

If so, are they going to let the Yuan float? If nothing else, that may save Airbus by taking pressure of the Euro.

Good point. China's economy has "ignited" in that its no longer and export banana republic and internal demand is driving most of the growth. It is also typical in western media reports on the Russian GDP growth to attribute it all to fossil fuel exports. In fact it is mostly driven by domestic consumption. A good indicator of this is the massive increase in imports in the last couple of years.

It doesn't matter. China is _indirectly_ dependent on US consumption, in the sense that the US consumption remains the keystone of the world economy. When the US economy contracts, other major economies feel it, even those that export little directly to the US (for example, Germany exports little to the US but suffers because its capital goods clients overseas do export to the US ... hence less orders for German capital goods.) Thus, when the US tanks, China _will_ go down, because the whole chain will start to come undone. Everybody else will be contracting as well.

That's leaving aside the fact that 19% is still a large number. Who wants a hit to such a chunk of the export sector?

I am very suspicious of this 'China as economic superpower' meme. It's an illusion. (Yes, I've seen China. Please no one bring up how they are there and how impressive it is etc.) When the US really tanks, China will be shown for what it still largely is: an impoverished Third World country. You US doomers fantasizing that your benighted country is about to get taken over by China are just dreaming.

I'm a USA "doomer" but you're the guy predicting a worldwide depression. Makes sense.

It makes perfect sense if you consider how high the doomer bar is set on TOD. Merely thinking there will be a worldwide depression doesn't make one a doomer by the standards of our more hardcore brethren, who expect a die-off, or at least a _total_ economic collapse attended with much [joyous a-hollerin' of]'head for the hills!'-type rhetoric. And there are people here who look for any old doom bogeyman, no matter how pathetic ('US owned by China' ... even I laugh at that, and I've got a generally low opinion of the US of A and its prospects... but please, let's be realistic).

Proper doomers do not even notice the prospect of a mere depression, except as the harbinger of what they really await:

'Look, Pa! Die-off's jest about here, I reckon! Head for them thar hills! Yeeeeee-haaaaaaaaaaaawwwwwww!'

Real Doomers have been in the hills for 20 years already.

Here's a story which may not have been mentioned on TOD yet:

Antarctic ice loss speeding up

E. Swanson

thank you very much.

Passengers put your tray tables and seats in their upright position.

We are now leaving the Holocene.

We could be entering the Magnetocene - where an unstable magnetic field alters the climate!

Or as was stated by scientists last week - the Anthropocene!


The Anthro-obscene?

From there it's just a hop skip and a jump to the obscene.

On a RealClimate thread http://www.realclimate.org/index.php?p=464 Craig Dillon suggests the Ohshitocene, that sounds like a winner.

May I suggest Ohshitocene — as in we sure didn’t see this coming!

"Oh, shoulda seen" - it coming.

I like this - the ohshitocene has a bit of a ring to it.

time to make ice while it is still possible. it's payback time.

There's the answer. Everyone needs to make as much ice as possible in our freezers and ship it to the poles. Problem solved!

Wait! I'm not thinking right. We need to build giant icemakers at the poles and produce the ice there. We could build mountains of ice that will not melt for centuries.

That's right up there with those "artificial trees" that have to be provisioned with alkali hydroxides to absorb the CO2.

almost there. now what if your icemakers - based solely on old technologies - make not only ice but also clean, renewable fuels in abundance?

You guys aren't thinking BIG enough! STYROFOAM! We need LOTS and LOTS of STYROFOAM! Cover all of Greenland with styrofoam! Cover all of Antarctica with it! Cover the Arctic sea with it - it FLOATS! Insulation - no need to make new ice, just keep what we've got frozen! Albedo - reflect that sunlight back out through those greenhouse gases! Heck, cover the entire northern half of Canada and Russia with it!

YE-HA! Problems solved! Cue up "Happy Days Are Here Again!"


A little food for thought -- what happens when billions of tons of water are suddenly displaced by vast glaciers surging into the ocean? Tsunami?
How about giant ice damns forming on the top of large glaciers and then suddenly expelling water over land and sea. There's a lot of water in those glaciers and if warming keeps pace it's unlikely all the melt will be gradual.

We beat the stuffing out of this dramatic, but nonsensical concern several weeks ago (no offense intended to poster)

Ice on a glacial scale is plastic - think tar on a hot day. Floating ice sheets can and do disintegrate but grounded ice sheets must flow out. Water beneath speeds the flow, but not that much. Have a look at this picture - 10% of Greenland's ice goes out that little appendix looking organ at the upper left and its the busiest single outlet by volume. That entire mass ain't gonna crowd out that little hole so I think we're safe unless a Chicxulub sized bolide lands right smack in the middle. Greenland's draining will be instantaneous in terms of geological time ... maybe only a couple of generations worth of human time.

Jakobshavn Glacier, Greenland

Ice sheets calving can and do produce tsunamis - I've been in one myself when a quarter mile tall sliver of ice came off the face of a tidewater glacier in Resurrection Bay near Seward, Alaska. The limit to the size of the tsunami is based on the volume of ice coming off the face of the glacier, which can produce locally significant events, like the 3' wave that we scrambled to turn into so we wouldn't capsize, but the chances of a calving event going global are zero. Ice dams do form with impressive melt water lakes behind them, and these do produce some significant local changes, but again they're just local based on the size of glaciers we have today.

Jeffrey Dukes' paper Burning Buried Sunshine: Human Consumption of Ancient Solar Energy highlights the massive amounts of biomass that went into producing fossil fuels. I've seen it mentioned here as an indicator of the irreplacability of FFs and the need for sustainable energy sources, in Dave Cohen's piece Burning Buried Sunshine for instance.

Curiously enough biofuels enthusiasts like David Blume take home quite the opposite message, since Dukes seems to suggest the refining process adds to the inefficiencies to an amazing degree. From a short summary piece:

One gallon of oil weighs 3.26 kilograms. A gallon of oil produces up to 0.67 gallons of gasoline. So 3.26 kilograms for a gallon of oil divided by 0.67 gallons means that at least 4.87 kilograms of oil are needed to make a gallon of gasoline.

Thus claims that FFs are an energy sink thrown around by the likes of Blume. This seems utterly absurd to me - where's all that extra oil coming from? Corsi's abiotic creamy nuget center?

The AFS Trinity plug-in hybrid drivetrain was unveiled this weekend. The system was installed in a standard SUV and has performance specifications equal to gasoline-only models. The inventors claim 150 mpg performance, based on a week-long driving cycle of 280 miles of electric-only operation and 60 miles of gasoline operation. The price premium is $8,700 per vehicle and the system takes 3-4 years to pay for itself in gas savings. This video is the most informative so far.

For TOD readers, the interesting web pages are World Oil and Oil Consumption Model. The World Oil page lays out the need for efficiency and includes the Hubbert curve by Campbell and Sivertsson.

The Consumption Model shows the plug-in hybrid technology significantly reducing North American oil consumption under several scenarios. In fact, the High and Maximum scenarios show consumption dropping below projected U.S. production, at least for a few years. In theory oil imports could be eliminated for a short while until population and VMT growth lead to consumption gains in the 15-20 year timeframe.

So it seems that it may be possible to keep the automobile oriented lifestyle rolling a while longer, but eventually and inevitably we're still going to need alternatives on a much larger scale.

The company also provides an interactive oil consumption model where you can tinker with oil consumption rates and hybrid performance and market penetration.

Of course, if the US did build plug in hybrid SUVs fast enough to keep ahead of the oil depletion curve, the electricity grid would collapse long before enough were built to eliminate oil imports. And if the grid could be upgraded, and the production of coal ramped up enough to keep ahead of demand, the CO2 emissions would guarantee that our grandchildren fry in a globally warmed world.

Business as usual is SO last year...

And how many bosses are going to let you plug in for free? John

Heh -- another chunk out of the pay check that you will never see.

According to a study by Pacific Northwest, the grid should hold up fine, and the extra revenue from sale of off-peak electricity could be used for things like carbon sequestration.
Anyways, that's a bit of a negative take on great news - it will be at least ten to fifteen years before they will have sold enough plug-ins to have any significant impact on the grid, and by that time at present rates of progress than for many in the States solar PV might well be economical to install on your garage rooftop, and would provide plenty of power for the typical electric mileage of a plug-in

A couple of problems.

Insolation in the Pacific NW is quite low (lots of clouds & drizzle, northern latitude, especially in the fall & winter).

OTOH, a good wind resource (not quite as good as, say, Scotland, but still good).

Solar PV produces power when most people are away (weekdays at least).

OTOH, they do have enough hydro to smooth things out (take solar PV, or wind when available, and supply electricity as demanded).

All in all, wind and more small hydro are the way to go for the Pacific NW for electricity until memories of WHOOPS fades and the US recreates it's ability to build new nukes. And concentrate on building out Urban Rail (Portland OR is a US leader and Seattle seems to be getting serious).

Best Hopes for the Pacific NW,


it would also be a good match for nuclear, since as you have said in other threads nuclear is really easier to make base load from.
Smooth the peaks and it gets cheaper still, which is what plug in hybrids would do if charged at night.
I referenced solar to avoid a debate with those who dislike nuclear, and in any case the likely time schedule for the widespread use of plug in hybrids matches nicely to the likely ability to make PV economic, at least in places like Los Angeles.
It isn't solar I dislike, it's some of the subsidy scams, and feed-in tarriffs.
Good old-fashioned R&D support is the way to go, and leads to less boondoggles.


I think he was referring to the study done by Pacific Northwest National Labs. This was not a regional study, but rather reflected the capability of the entire US grid.

If the vehicles are plugged in at night after people get home from work, it shouldn't be much of a problem. The coal and nuke plants have to run at night, even if not all of the electricity is being used. The start-up times on these plants does not allow for scaling power production up and down.. That's what the hydro and natural gas plants are for. It's unlikely that people will have their cars plugged in during the day, as they will be at work, and as was pointed out, most employers wouldn't let their employees plug in at work to recharge their vehicles. (Except for Google, but they have solar panels covering their building, and are pumping money into the development of PHEV's. If only every company was like Google in that regard...)

The start-up times on these plants does not allow for scaling power production up and down.

True for nuke, not for coal.

Heat rate charts I have seen for coal fired plants show a -8% drop in thermodynamic efficiency from 100% capacity to 50% capacity (and no real fall-off to about 30% capacity). Plant specific #s of course (was plant designed for base load or load following ?)

Run coal fired plant at 80% to 100% (adjusting every 15 minutes or so) load during daylight hours (weekdays) , drop to 60% after 8 PM, 50% after 11 PM, and 30% at 3 AM could be "typical". No complete shutdown and reheat required (tough on coal fired equipment, but load following is normal).

Coal can be baseload or load following and each grid is different in it's load curve and generation mix, but what I described is not abnormal for US operation.

Load following is all the French use their coal fired plants (~10% of national grid) for.

True for nuke, not for coal.

No, not true for nukes either.

Control rods: These are made with neutron-absorbing material such as cadmium, hafnium or boron, and are inserted or withdrawn from the core to control the rate of reaction, or to halt it. http://www.eoearth.org/article/Nuclear_power_reactor

The power out of a nuke plant can be raised or lowered to match the load just like any other plant. However because the cooling or heating times of the nucler fuel would be much slower than with coal plants a secondary method of load control must be used in order to respond to load changes that often happen very quickly:

The load must always equal power generated. There can never be electricity generated that is "not used". Power of course could be dumped into a "dummy load", a huge resistor bank, but those are usuall only used when testing generators.

Ron Patterson

Several issues with load following nukes (I may miss some).

Thermal stress if operating temperatures vary significantly (not an issue with coal fired plant if it breaks, except $. Potential safety issue with nukes).

A significant % of nuke heat comes from radioactive decay of fission byproducts. Once created by fission, only God can slow this heat.

Large thermal inertia of nukes, making modulation like turning a large ship.

Designed for base load in dozens of details.

AFAIK, the French experimented with 4 nukes for load following with less than satisfactory results.


There is also an optimum "burn rate" for the nuclear fuel (depends upon configuration and degree of enrichment), whereas for coal dropping load from maximum means that pulverizers can (and often do) produce finer coal for flame stability.

Most PC boilers can go from 50-90% load in a pretty short time frame (and back again if they need to) and that's mostly governed by how fast you can add heat the furnace zone and what the refractory and waterwall tubes can take.

You are correct, changing load on a nuclear unit is a little like steering a large ship.

You are correct, changing load on a nuclear unit is a little like steering a large ship.

True but the grid is never just one plant. A nuke would be on a grid with lots of coal or gas plants. These plants would likely adjust the load rather than the nuke. In France however, where 70% (or so I have heard) of their electricity is generated from nukes, this would likely be a problem.

And in response to Alan:

A significant % of nuke heat comes from radioactive decay of fission byproducts. Once created by fission, only God can slow this heat.

I cannot find what that percentage is with Google but I would bet it is not very high. After all Nukes do moderate their generating power with the control rods, albeit a very slow process as you point out.

Ron Patterson

According to this, about 7% of the heat is delayed with time constants on the order of tens of minutes, rather than coming straight from the fission itself. This does not clash with what I remember from nuclear physics, and should be enough so that a sudden unpredicted change in load would not be a Good Thing. Solids are internally busier and more complex than intuition suggests, so large temperature swings cause problems. 7% of full heat is still a lot of heat if you suddenly have to dump it, so you engineer for it, but you prefer to avoid doing it. Historically it's been cheaper to let something else do the routine load matching than to engineer the capital-intensive nukes to handle it well, and that's no doubt why the French, who have less "something else", felt compelled to experiment.

The control-rod physics involves just the neutrons. It is sensitive, as less than 1% of the neutrons are delayed, and those few delayed ones are what counts. The dynamics plays out much faster, in a fraction of a second.

You also have to keep other parts of the system in one piece, see Starship Trooper's comment below.

Actually, the French have plenty of 'something else' as they are in a partial European grid and access loads of, for instance, German power, who continue to burn loads of coal, green efforts notwithstanding.
That's the real reason why no-one has worried too much about whether the nukes are adapted for peaking - it hasn't been worth the bother.
The French think pretty long-term about power though, as they have never had much oil or gas, and so have done some experimenting.
Storage solutions from pumped water to whatever could of course provide peak power if it was not worth altering the output of the actual plant, and will doubtless be introduced if needed.
The progress announced today on plug-in hybrids might smooth peaking quite a lot anyway, as whatever GM does I am betting Toyota will deliver.

That is a very nice run-of-the-river project. You take water/power when it comes. Not even a minimal forebay from what I saw. There are dams upstream that can time releases to peak demand, but it is happenstance for how long that water takes to arrive at this hydropower plant. So this plant does nothing for load following from what I can see. Nice 62.9% load factor though :-)

I noted a "nuclear" facility on the map. France dismantles much of old nuclear power plants (waits 50 years to finish the job on the hottest sections) and the steel is recycled here. And what do the French do with the scrap nuke steel (still a bit radioactive) ?

They recycle it into new nukes ! Steel alloy specifications are known, etc.

Best Hopes,


Demand following has become the norm in many US service areas compared to, say, 15-20 years ago when coal-fired boilers tended to be divided up into baseload (large units) and demand following ("small" units). You really wanted that 1200 MW supercritical unit running nearly flat out if you could. (Besides running a unit like this through startup is no fun whether hot, warm or cold). Now, within reason, you'll let it wander and track demand according to dispatch priorities.

The limit on turndown is really governed by the degree of control over superheat in the HP and reheat section of the turbine so that you don't form water droplets in the last stages of the LP-turbine (some split turbine/generators can avoid this problem to achieve greater turndown but do so with even more energy loss/inefficiency). Whether the turbine is spinning at 1800, 2400, or 3600 rpm, the meeting of those long blades and water droplets at those tip speeds is a bad, bad thing.

But compared to the startup/shutdown cycles, that were common many years ago for smaller to mid-sized coal fired boilers, with all the associated refractory heating issues, these long runs at operational loads can reduce maintenance downtime in the long-run.

Besides, so many utilities have installed gas-fired simple turbines for peak load and spinning reserve that it makes sense, from an operational standpoint, to let those smaller to mid-sized coal units sit idle through much of the spring and fall seasons and be the operational load in those off-seasons when the big guys need maintenance.

As I've posted before, it makes sense to erect PV panels over parking lots and install metered recharging stations so that people with electric vehicles can recharge during the day. If it is metered, then the parking lot becomes a profit center rather than a cost center to the employer - what a deal for them! Being able to recharge at work would allow a wider commuting radius for people with PHEVs.

It only makes sense to match peak insolation to load, and this is an elegant way to accomplish this.

Not only that, but the panels can be grid-tied, offloading power onto the grid when a car isn't plugged in. :)

Interesting graphs.

First one, "Big shortfall" says Peak will be around 2010 and from there it's all downhill.
Next graph, "hybrids will reduce consumption" says consumption will go up even after 2010, and hybrids are the solution for reducing imports from Middle east.
Mixed messages..

Other than that, the plug-in hybrid is a great concept and I hope it will be put into production.

Fantastic site and links. Thanks.

The two ways these things could actually help:

1) if enough of these were introduced to get the world ahead of the depletion curve such that oil was avaialable inexpensively enough to allow the other structural changes to be made that are needed such as rebuilding rail and water tranport, rebuilding city cores, alternate energy systems (perhaps distributed) etc.

2) If it encouraged manufacturers to make the damn vehicles smaller so that they wouldn't require up so much damn room for parking.

Yesterday, there was a long, and mostly interesting thread on nuclear power.

Nuclear seems like it will be necessary if we are to have the plug-in hybrids and the electrified rail that are favored on this site.

However, my initial question, in starting the thread did not have to do with safety or waste disposal -- it had to do with the perception, that in the past, at least, nuclear power turned out in practice to be a gigantic swindle. Taxpayers and ratepayers in the Pacific Northwest (I know nothing of the East) are extremely reluctant to consider a repeat of WPPS, Trojan, and the like until the nuclear industry can demonstrate it is not a giant Ponzi scheme.

Is a rational response to our energy situation even possible, given human psychology and the state of politics in the world?

The US South, with minimal wind & hydro potential (except Texas) and with bad nuke experiences concentrated in TVA, is likely to see the first nine new nukes in the USA. (Finish Watts Bar 2 and 8 new ones).

After those are built, and time (30+ years since WHOOPS by then) and post-Peak Oil will make nuke acceptable in WHOOPS country IMHO.

Meanwhile just build LOTS of wind in the Pacific NW (they go well with your massive hydro) and develop small hydro.

Best Hopes for a First Wave of Wind and a Second Wave of New Nuke,


Alan -- what is your take on the negative comments on wind (upthread), claiming that there is no useful contribution by wind power in Denmark and Germany? That seems so very different from what I have been led to believe.

If you go out to the Columbia Plateau, near Condon, there are hundreds of wind machines going in. They are not unattractive -- in fact, they are quite complimentary to the stark landscape. In places, wheat can be farmed around them, and they certainly are no impediment to livestock operations. I am hoping this will turn out to be something positive. The folks out there mostly seem to like them.

Wind is a significant contributer to energy and a less significant contributor to firm capacity. That is, they generate a fair amount of MWh, but they can be "counted on" for a lower # of firm MW (as low as 10% of nameplate in Texas, where average generation is 33% of nameplate).

Pumped Storage is actually an energy sink (80% or 81% energy out of energy in) but they are a very reliable source of MW capacity when called upon. So minus MWh, near perfect MW.

Thus the two go very well together, like red beans and rice :-)

Absent hydro or pumped storage, the load following characteristics of coal or combined cycle NG (the efficient one) can accommodate a limited amount of wind (perhaps 25% of MWh) quite usefully.

Nuke, given it's inability to load follow, is a fixed part of the grid. Nuke + wind w/o hydro or pumped storage is NOT a "match made in heaven". But nuke (current designs) alone cannot supply a grid in any case.

The USA, with wind just above 1% of total MWh, is still quite some way from reaching the need for more pumped storage. But with 40% annual growth (compounded), slowing to 25%-30% (compounded) we could reach that point in a decade.

Best Hopes for Wind and Nuke,


I was the one who posted those links.
Wind power not being too helpful in Germany and Denmark does not necessarily mean it is no good in other areas.
It might have higher wind resources, which are critical to the economics.
The issue I have with the massive installations in Germany and Denmark is that they are basically the result of huge levels of subsidy, and have been put in places where they are not and never will be economic.
Since they are also pretty bad at reducing CO2 emissions on a cost per kilogram basis then there is not much point.
I also dislike then in the UK, because that is such a small and crowded island, and it seems shame for fairly small amounts of energy to damage with access roads and so on the few wild places we have.
None of that means that if it is economic, perhaps with the allowance of some small carbon tax or whatever, to build windmillls in West Texas or somewhere it is a bad idea, just that things should be taken on a case by case basis and care should be taken that they are not just there to gobble up huge amounts of subsidy.
IOW, don't write any blank cheques or you will get swindled.
There are more scams in renewable energy than in anything else I have come across, and if you just give then the odd few billion they always swear that the mass production will make everything right!

The US South, with minimal wind & hydro potential (except Texas)

Alan: You should already know this, but for the record:

Southern Appalachians do have considerable wind potential, if we can overcome reluctance to spoil viewsheds with WTs on the ridgelines. There is good wind potential offshore of the Outer Banks as well; again, viewshed issue is the obstacle.

Southern Appalachians have good hydro potential too, but mostly already realized by TVA. Still some good micro-hydro potential there waiting to be tapped.

There might be good tidal/wave potential off the Outer Banks and maybe some other places as well.

Most of the SE US should have excellent solar potential - almost as good as SW US.

Gee, just build the wind turbines on the present outer banks, and soon they will be off-shore.

Most of the SE US should have excellent solar potential - almost as good as SW US.

Not quite, but don't let that discourage you.
Note that the Pacific NW (east of the Cascades) does comparably well, the result of fewer clouds and longer days in the summer.

Well, virtually all of NC looks to be 4-4.5KWh/sm/d, compared to 5-7K for the SW. So true, "not quite", but still pretty good.

yeah - but look at that really dark circle out in south-eastern California - all bet that circle alone (and there are heaps of empty lands out there) could power most of the electrical needs of the US - I wonder if the cost of Iraq would have paid to build enough solar panels for that?

In 2003, a residential solar system costs about $8,000-$12,000 per kWp installed.

Depends on how much we've spent...
If you take the $727 billion spent by the US annually on the military (as posted on a DB a few days ago,) we could purchase and install solar panels on enough houses to generate 60,583 MW.
That's a pretty big number.
Mind you, that's peak, not sustained. Still... I know where I'd rather have my money go.. the PV..

Broke down there with a modified school bus full of hitchhikers about an hour into California past Needles.(had been picking them up and dropping them off since Amarillo, TX.) Fortunately had a motorcycle strapped to the front of the bus that I rode to get parts.

Remember the southeast is the new southwest, hotter and drier.

There are some windy hot spots (some inside Smoky Mt. Nat'l Park, etc.) in the SE, but they are not large in area (see plains of ND, KS, TX, etc.) and hard to get to, so the total renewable energy potential is relatively small.

Small hydro is underutilized across the USA (too much paperwork required), including the SE.

Insolation looks good in Eastern OR & WA, BUT it is mainly summer sun. That short winter day thing with the sun never that high in the sky. A good match with wind (more winter power) though.

SE sun is more evenly distributed year round. Lower latitudes combined with clear winter skies give decent winter sun (summer haze & clouds reduce summer insolation in the SE). Just too many birds dropping opaque solar PV blockers :-)

Best Hopes for developing what we do have,


According to The NC State Energy Plan, page 37:

North Carolina has the capacity to produce 8 million MWh – about 7% of current electricity consumption in the state – using wind technology in Class 3 and higher sites. In order to compensate for existing development,
environmentally sensitive areas, and other land-use conflicts, this estimate excludes 50% of total forests, 30% of total farmland, and 10% of total rangelands

Note that were the obstacle of ridgeline protection to be removed, this figure might go up to more like 15% - maybe more with newer technology.

We won't be able to supply all of our electricity needs with wind, even if there is a massive energy efficiency effort covering electricity as well as other energy uses (though if we were to achieve a 50% reduction in electricity demand, then that 15% would jump to 30%, which is substantial). But it will help make the gap that needs to be filled by PV all that much smaller.

It may come to a point where the taxpayers and ratepayers will have to act like citizens instead of mere consumers, and accept that life is never absolutely 100% free of risk, financial or even bodily. If this burns out their mere consumer minds, then the lights will go out and, with today's highly dense and aged population, that will expose them to a great deal of risk, not just the parts-per-million trivia over which they currently whine and snivel incessantly.

What seems very possible is that they will sit around, idly NIMBYizing their fool heads off, until the lights to start to go out. Then they will panic and, as has happened countless times in history, they will invite a dictator to take over and save them from their own stupidity. Then we will all suffer the worst of worlds - high risk and tyranny.

"Is a rational response ... possible ... ?" The founders of the USA exerted themselves tremendously to try to ensure that the arbitrary, emotional whims of a populace they correctly distrusted could not be put into effect quickly. They did so largely by designing in procedural delay and complexity in order to buy time to let people simmer down. Unfortunately, much of that is now bypassed by electronic media and polling techniques. So, IMO, if the response is determined in a plebescitory manner based on the whims of consumers, then, in a word: no; it will be a right royal mess.

Funny how the Pakistanis are faced with electricity cutbacks, and they want to RID themselves of their tyranical dictator.

"... and they want to RID themselves of their tyranical dictator"

Which will be replaced by another tyrannical dictator. At least I don't remember this country being in any other mode.

'What seems very possible is that they will sit around, idly NIMBYizing their fool heads off, until the lights start to go out. Then they will panic and, as has happened countless times in history, they will invite a dictator to tke over and save them from their own stupidity. Then we will all suffer the worst of worlds - high risk and tryanny.'

Probably quite true...and, TPTB are beginning to wonder what the cold hungry and ARMED masses are going to do. It appears that the gov is taking the first baby steps toward taking on the powerful NRA lobby...

'Public 'threatened' by private-firearms ownership
Government argues gun restrictions 'permitted by the 2nd Amendment'


...snip...'Clement suggested that gun rights are limited and subject to "reasonable regulation" and said all federal limits on guns should be upheld'...snip...

'Because of the specifics of the D.C. case, the ultimate ruling is expected to address directly whether the 2nd Amendment includes a right for individuals to have a gun, or whether local governments can approve whatever laws or ordinances they desire to restrict firearms'...snip...

'He noted especially the federal ban on machine guns and those many other "particularly dangerous types of firearms," and endorsed restrictions on gun ownership by felons, those subject to restraining orders, drug users and "mental defectives."...snip...

Hmmm... Mental defectives? Does that include VPs that shoot their lawyers? :)

"Does that include VPs that shoot their lawyers?"

Stop trying to make him seem reasonable!

Nuclear seems like it will be necessary
Is a rational response to our energy situation even possible, given human psychology and the state of politics in the world?

And yet, no one seems to have workable suggestions for attacks on fission plants.


When I was refueling the beasts,in my youth,I recall one problem that caused many.There is no "set"design.The last time I paid attention to such things there was something like 103 operating stations......with 103 different designs....think about that.There is something like six basic design,from the 6 engineer groups that started nuke.and damn near every one is different.I am not talking abot places like Oconee or palo verde..with a bunch sitting in a row,but there is a whole bunch of diff designs out there.The French were smart...they picked one,and made a cookie cutter operation out of it.This is the only smart way of doing nuke again

"The French were smart..."

Yup. However, it might be good to have two or three designs so that if a flaw is found, you don't shut down the whole country while you fix it.. In that respect it's less of a risk for France because they're only a part of an EU that is far bigger than they are.

Incidentally, similar considerations apply to Alan's rail stuff. The notion that every city in the country has to have their very own tram, light-rail, or subway car design is nonsense. A very small number of designs would be a lot more economical. A country that's way over its eyeballs in debt needs to treat stuff like that functionally instead of as a competition for some kind of urban-jewelry prize.

Yes, a handful of standardized designs (all already in service) to chose from is part of the reforms needed.

The French have a standard tram "design profile" and one can chose a Siemens, Alsthom, Breda or other makers model (some have more than one version, depedning upon taste). But a Mulhouse tram can be used in Grenoble without modification.

For Light Rail, I would offer a choice of a Dallas profile (bigger and faster) and a 2.65 m wide low floor design profile like Portland.

Common controls and 750 V DC power for all new cities. (Seattle went with 1500 V DC because of long tunnels and BART is 1 kV DC for no good reason). Thus power supplies, motors, etc can be standardized.

Miami and Baltimore use the same Rapid Rail/subway cars. Having a dozen cities using the same cars makes for joint bids for new rolling stock and lower costs.

Best Hopes for Commonality,


After Three Mile Island, all of the B&W reactors had a multi-year outage for retrofits. If TMI had been a Westinghouse reactor (or B&W sold as high a % as Westinghouse did), widespread blackouts would have occurred.

All of the French N4 reactors (only four from memory) went down due to a common design fault. All the UK Magnox reactors used the wrong nuts & bolts (from memory).

IMHO, there needs to be 5 common nuclear reactor designs in the USA, with no more than 1/3rd for any one design. We have the existing 103 reactors which give diversity for the first dozen+ new nukes, but I would like to see new nukes built by Areva-Siemens, Toshiba-Westinghouse, GE, Mitsubishi, and AECL (CANDUs). Three PWR, one BWR and one CANDU (HWR). This would avoid the common design fault problems and enough commonality if the same designs are used in other nations.

Best Hopes for Some Commonality,


And tell me again why aren't we simply buying French designs that are proven? Oh! Wait! Cheese eating surrender monkeys, right? Thats why ...

Having a sick of George "Waterboard" Bush kind of evening here ...

The next generation designs are better. Bigger, more economic, lower fuel use, safer.

And the French design has improved through several phases. The latest is called the EPR (teamed with Siemens), 1.6 GW, and the first one is being built in Finland and the second one in France just south of England (and designed for the export market). A third may be Calvert Cliffs 3 in Maryland or Virginia (forgot which). I think China ordered a couple as well.

Five designs, all based on existing designs with LOTS of operating experience, and with no more than 1/3rd of new nukes to any one design, should severely limit any problems with common design faults, even as the nuclear power operational in this nations doubles and triples as older nukes retire. By 2035-2040, few current reactors will be likely be operational and the USA may have 250 reactors producing 400 GW.

It would be a disaster if all of the new reactors are same type and it is discovered that a link in the control rod mechanism swells with age (radiation side effect) and can jam AND THIS DEFECT AFFECTED EVERY REACTOR BUILT SINCE 2008.

Historically, if people cannot afford to turn off nukes with recently discovered faults, then they simply do not. Despite whatever safety risks continued operation brings. A moderately diverse fleet (with geographic diversity, Texas should not build only Mitsubishi nukes for example) will allow shutdowns of any type that is discovered to have unsafe defects.

Best Hopes,


As I'm sure you will agree, Alan, this just illustrates why talk of a "crash" program to build massive numbers of nukes is simply not a good idea. Even with a lot of deliberation and care, the risk of a simple, avoidable screw-up that can disable a whole fleet of reactors for months or years is very high. Throwing them together slap-dash is hardly likely to reduce that risk. Throwing most of our scarce investment dollars on a bunch of idled reactors is hardly going to be a winning strategy.

Well, India comes to the rescue of the US and mobility:


Citizens, you will be able to keep up your commuting :-) and save !!

EU rethinks biofuels guidelines


Well ; It looks like it will take 2.6 gallons of July ethanol @$2.06 to buy 1 bushel of July corn @$ 5.36.

And then yield is maybe 2.8 gallons/bushel. Doh!

Govt. subsidies knocked 50 cents off the price of ethanol, then the ethanol only got 80% of the fuel efficiency of gasoline. The wholesale price of ethanol was not the same as the retail price of ethanol + you got the price of corn more than double what it was three years ago. So you got price increases at the pump, increased burden on the tax payer, and increased food prices. If ethanol use triples as projected if the energy law remains in place, what will happen to the price of corn? It is projected to end all grain exports out of the U.S. and to require massive grain imports tilting the world markets out of balance and corn limits up. Great for the corn grower who does not give a damn about others. Not good for the consumer.

Ethanol may reduce some ozone emissions, yet the required use of energy in ethanol production creates greenhouse gases and the end amount of CO2 created when the ethanol was burned adds more greenhouse gases.

The EROEI of ethanol was 2:1 compared to 30:1 from light petroleum production in the Mideast. Too much inefficiency in big government.

According to others the EROEI of ethanol was 1:1 and further increases in the price of natural gas, transport, fertilizer, and corn feedstock make it less efficient than it was a few years ago.

IMO US corn Ethanol production will cease to increase when:

Ethanol corn consumption reduces the annual crop used for other purposes to less than 9 billion Bushels.

This low number has not yet been achieved. If in the current year we produce 7.5 billion gallons that will still leave a balance greater than 10 billion bushels for other purposes.

The current gas and ethanol prices are already causing concern for new plant construction.

The need for food will drive corn prices beyond ethanol’s ability to compete with other energy products.

Time's up for petrol cars, says GM chief

THE world's biggest car maker, General Motors, believes global oil supply has peaked and a switch to electric cars is inevitable.

In a stunning announcement at the opening of the Detroit motor show, Rick Wagoner, GM's chairman and chief executive, also said ethanol was an "important interim solution" to the world's demand for oil, until battery technology improved to give electric cars the same driving range as petrol-powered cars.

Mr Wagoner cited US Department of Energy figures which show the world is consuming roughly 1000 barrels of oil every second of the day, and yet demand for oil is likely to increase by 70 per cent over the next 20 years. Some experts believe the supply of oil peaked in 2006.

The remaining oil reserves are deeper below the Earth's surface and therefore more costly to mine and refine.

"There is no doubt demand for oil is outpacing supply at a rapid pace, and has been for some time now," Mr Wagoner said. "As a business necessity and an obligation to society we need to develop alternative sources of propulsion."

Which way to the bandwagon?

The supplier claims it can produce ethanol from "almost any material" such as farm waste, municipal waste, discarded plastics - even old tyres.

I like this. Maybe it's even possible to feed the magical ethanol reactor with unsold GM pickups and SUV's, straight from the dealers parking lots.

I like this. Maybe it's even possible to feed the magical ethanol reactor with unsold GM pickups and SUV's, straight from the dealers parking lots.

This and the Ohshitocene in one Drumbeat! LOL

Refreshing of Wagoner to sing the 1000 barrels per second refrain.
It would be better (for everyone)if GM got off their rebate and loophole mining mentality (yellow gas caps and alternator belt hybrids) and got down to it with the Volt and it's offspring. OTW the Prius PHEV awaits and bye-bye GM.

There won't be any crushing the newborn models this time. I hope a little.
GM says 2010 a stretch but doable if everything goes right

An automotive reality check from Nissan, with credit to public transport

Car Culture is Fading

Be grateful. What would you have said if he had denied there was a problem with oil supply?

Trust me, I am immensely grateful. I never thought I'd see the CEO of GM talking about Peak Oil! This is one bandwagon I wish everybody would climb onto.

Well Glider... what the heck is he going to give speeches about? Selling Avalanches and Tahoes?

I mentioned this to my wife. She said... "freaking ethanol? he's going to sell ethanol? Dumb SOB. He needs to get into the shoe business... that's where we're headed."

I wonder if they learned the underlying message from that "do-it-yourself Tahoe ad" fiasco. The voice of John Q. Public has never been so loud.

Actually, he was very careful to say ethanol was only a stopgap, and that electrics were the goal. Now if only they had one.

Maybe they should do something really symbolic and open a buggy-whip production line...

Link to the video of Rich Wagoner:
And new announcements on the progress of the e-volt due today

Unfortunately, GM does not actually have an electric car for sale -- just vaporware and hype.

Toyota have committed to a plug-in hybrid too, and they usually do what they promise.

Is this real?

I think this story is worthy of great interest in the MSM, but when I searched Google and NYT and BBC I found no reference to Wagoner making any of these statements, only the story by the motor editor from Australia.

What gives? Is this a real story, and if so, where is the supporting press release or Wagoner show?

Sam Penny
the Prudent RVer

BTW, I really want to believe that this actually happened, and then see some real response about it.

Australia seems to be the only one reporting it (yet). However, they are often the first to report things. Since it's tomorrow over there. ;-)


I have spent the day searching off and on for some other reference to Rick Wagoner saying this sort of thing and mentioning Peak Oil. Nada!! After a full day of business here in the USA, I would expect someone to pick this up if it is for real.

My conclusion is that some kind of fake press release was planted, and only one columnist picked it up. But no one else bit. Interesting how some things work.


Excuse me but I too find it odd. You might try the video link above from Dave Mart. It was just working and appears real. But yeah if it doesn't make the MSM... Hey what did Paris H. do today?

If it can't be handled properly right away better just pick it up on the next news cycle.

Is this for real ? Just last year, GM was saying how they would leap-frog the competition and go right to Hydrogen. Google GM and Hydrogen.

And only a couple of years ago, Toyota was saying plug-in hybrids would never work.

Yea, but they were right! Depending on what they mean by "work".

With all this discussion about biofuels how's this for an answer?


In my opinion there are only two producers ...

Fossil fuel miners and photosynthesis farmers

The rest are consumers

What did you do today to get your 2000 calories of food plus your electricity ,gas etc. ??

Does splitting firewood count? I did that. :)

A campus committee I'm on has been struggling this past fall with how cost-effectively to meet LEED standards for renovating a building on campus. Here is an intriguing article about current issues with the growing popularity of LEED construction, including some encouraging developments in designing more energy-efficient buildings:

The wider public appreciation for the threat of global warming has moved LEED into the mainstream. With that acceptance, however, has come a push to focus the program more heavily on energy. Kent Peterson, president of the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE), says, “We’re pulling out the stops to move the industry up the energy-conservation curve.” (ASHRAE writes the standards that guide building mechanical systems.) The society has part­nered with AIA, USGBC [U.S. Green Building Council], and the Illuminating Engi­n­eers Society of North America on guidelines that should deliver efficiencies 30 to 50 percent better than current codes.

ASHRAE also intends to introduce a mandatory standard that would require all buildings to be 30 percent more efficient by 2012. This will enforce a stiff learning curve on designers and builders, which could relegate the rest of LEED to the status of frill if coping with energy becomes all-­consuming. ASHRAE and AIA are pushing Congress to commit to building construction that is climate-neutral by 2030. To meet that goal ASHRAE will have to get guidelines standards into the market by 2020, Peterson says, a short time for standards that will drive major building-industry change.

Robert Ebersole, known here as oilmanbob, died on December 13th.


He'd been struggling with complications from diabetes. I spoke to him a couple of days before he died and he told me he was on the mend and he'd be back as soon as his computer was fixed. He was the first Drum Beat regular with whom I had personal contact, he very much encouraged me to go out and find something to do that fit my area and skills, and I'm going to miss him.

Very sad to hear that. I always enjoyed his posts. While I never met him, he seemed like a very good guy. My thoughts are with his family.

I was wondering why he'd not posted in some time.

RIP, Bob.

Yikes. Thanks for letting us know.

SCT, Thank you for the very sad news about Bob. He was the first person that I felt a close connection with on TOD even though we never met in person. My warmest regards to his family and friends. We will miss you Bob.

Perhaps TOD should have an honor roll of members that have passed?

Thanks for letting us know, SCT. I've missed his posts too. He lived in Galveston, and I always appreciated his insights on the Houston/Galveston area.

Looks to me like he made his last post here on November 21st. Here is the link to it:


As a resident of Houston, I always looked for oilmanbob's posts. I'll miss his perspective.

Thanks SCT for letting us know.

Sad news indeed.
He will be missed.

I'll miss oilmanbob.

If I remember right he mentioned that he had diabetes, and was not a young man. I don't think he expected to survive very long if things crashed fast, but he sure did want folks to wake up and help to prepare a better future for the younger folks.

Rest in peace Bob.

He was one of many who drew me to this site with inside knowledge and, not to underestimate, stories.

His conscience was in the right place and he did what he could to educate people in a very personable way. A good example for us.


TOD has lost a sane and intelligent voice,
I will miss his posts

Agreed. Humble and patient, too.

SCT...thanks for letting us all know. His passing is a sad day for the virtual TOD family. Alan, can you do a New Orleans-style tribute for him sometime this weekend?

I never met Bob but certainly gained from his posts. I'll miss him. My best to his family.

Peace, Bob

That's sad - I liked his posts, and he won't get to see what happens.

I shall miss him and his compassionate, knowledgeable posts. My thoughts are with his family.

That's very sad news. I always looked forward to his informed and reasoned commentary.

RIP, Bob.

Thanks SCT;

It was great to hear from an independent in the Oil Field. What did he call his trade, 'Landsman'?

Bob, thanks for being a generous member of this conversation! This is a strange way for humans to gather, but I value this level of contact in my life, and I suspect you did, too.

Bob Fiske

Very sad. He always came across as being very humane.

Thanks SCT, he is missed.

I think this is the correct URL for the radio station mentioned in the obituary. I sent a few dollars:

KPFT: http://www.kpft.org

Very sad indeed. I really enjoyed his posts and remarks about oil depletion.. and life in general. May he rest in peace.

On the final day of ASPO USA 2007, Bob's name was mentioned as a significant volunteer to ASPO. He was sighted for his considerable knowledge of the Houston area in assisting in organizing for ASPO 2007.

He came to attend the first day but became ill and had to leave, and missed the rest of the conferance.

Never had the opportunity to meet him . He will be missed here at TOD.

Very sad news indeed.
Bob was a solid contributer.
I recall reading about his diabetes blackout and auto accident. You'd think that in this day and age diabetes would not be that big of a Black Swan. But for Bob unfortunately it was. We'll miss you Bob. You'll be up there watching over us as the Peak Oil tsunami sweeps in and wipes the rest of us out.

That's a big loss. He was one of the most knowledgeable and respectful people that I met on this site.
I always enjoyed his balanced opinions and insight knowledge on various topics, not just energy.

We will miss you Bob.

Oilmanbob was very knowledgeable, was very willing to share his knowledge with others, and always interracted with fellow posters in a patient and gentlemanly manner (something I have not always been able to do).

While I never had all that much interaction with him specifically, it makes me realize that in this internet age you can share emails day in and day out with someone without ever meeting the other person, and then when one of the email correspondents dies, it's almost like nothing ever happened. Virtual information .... virtual people. People come and go like pixels on a screen.

For me, this is a reminder that I've got to get away from the screen, get out more, and interact with more people the old-fashion way .... face to face.

very, very sad. will miss bob.

Oilmanbob was a gentleman and an optimist, he was someone who looked for the good side of things. I always read his posts and thought of him as a can do person, peace be with you Bob Ebersole.

My feelings about Oilmanbob are the same Joule. I read SCT's news this morning and I felt really sad. Even though I didn't really connect with him myself thru postings.

Somehow it affected me and made me somber the whole day. Exactly what you said Joule about Virtual friends.

It reminded me also that I've got to get away from the screen, get out more, and interact with more people the old-fashion way .... face to face.

Many of us may never see the effects we are all planning for.

Fare Thee Well my virtual friends. Even those of you I may have disagreed with and P'ed off.

None of us gets out of here alive. Hug your family members and friends and tell them how much they mean to you while you can.


oilman bob will sorely be missed here on TOD. Condolences to the family.

another old hermit

Awwwwww, shucks that's really sad. Bob's humanity always shined though to me, even in this medium.

Thanks for the notice, SCT.

I'm very sad to hear that Bob passed away. His contribution to TOD and the Peak Oil movement cannot be overstated. I'll always appreciate what I learned from him.


I'll miss his always insightful, thoughtful and intelligent contributions to this community; his background and experience as expressed through a peak-aware voice always meant "stop and read" when trying to keep up here at TOD.

Thoughts to his Family...

That is sad to hear. I wonder about his medical care given his diabates led to complications. My condolences to his family.

My spirituality describes a path rather than a goal, and I try to live and let live about these matters and I'm in a distinct minority. I believe that we don't own the natural world, but intead should be stewards-protectors-that we have a duty to protect it and pass the world on better than we received it. And, most importantly, to act with love for the world and its people. The rest, I don't know, sacrifice always sounded barbaric and if we didn't start out with a god by now we have created them.Bob Ebersole

I'll carry on that message. Thanks Bob.

Leanan...perhaps the TOD staff could put together a tribute of Bob's best quotes?

Wasn't going to say anything until tomorrow's Drum Beat, but the family had only a sketchy knowledge of who his contacts were which is why we didn't get notified when he died. I spoke with his sister in Pennsylvania, expressing my intent to send her a letter describing my interactions with him, and she said this would be welcome by her and more importantly Bob's son, who is just twenty years old.

I'll announce this again tomorrow, but if anyone has a Bob story they'd like included they can drop me a note at sct at strandedwind dot org. A list of quotable quotes would also go over well if someone has kept a list of the really good ones.


I appreciate your sharing...this is so sad.

Here is one of my favorite posts of Bob's:

Peace to a man who spoke from his heart.

Very sad to hear. A great loss for everyone he knew and touched, especially all of us at TOD.

I believe you just visited him and had your picture taken together. Perhaps it would be appropriate to post it again, in memorium.

All the best to his family

Lets keep his spirit alive.

It took me a bit of time to write this because of the shock. I had left several messages on Bob's cell phone, worrying about him until the line went dead. I mentioned this to SCT and worried about it.

I went up a couple of days before ASPO-Houston and Bob picked me up the Amtrak station in Houston and we spent a couple of days in Galveston. At his behest, I had asked Ed Tennyson to develop a plan for a commuter train Galveston & Houston and we hoped to present this plan to some local influential people (editor of local newspaper, city council member, etc.).

When schedules did not work out, we agreed that I would make a special trip back "later". And perhaps Bob could swing over to New Orleans.

We also talked quite a bit about life philosophy and how this relates to Peak Oil. How much effort to help society adapt vs. how much effort to save one's own skin vs. friend & family.

We both agreed that death is the inevitable fate for all, and what matters is not postponing it as long as possible, but what you do till then.

Bob promised to send a $100 gift card to a woman sheltering street musicians and artists (and anyone else cold and hungry) in her home in New Orleans. This promise was made within a few days of his death. I will make good on that promise.

Fond memories,


Damn, I liked him. Peace, oilmanbob.

From the obit, he was about my age; I feel so old now.

RE: 70 Dollar Oil Is Realistic: Sarkozy

That really paints a picture in my head...Sarkozy, hat in hand, look of desperation on face, on one knee pleading to the Saudis. Meanwhile... the Saudis are nodding off into deep slumber...snoring gently, while dreaming of their personal custom Airbus A380 soon to be delivered.

Meanwhile...'George Bush's magical mystery tour of the Middle East found him inside the insanely opulent Emirates Palace Hotel in Abu Dhabi Sunday where he delivered his much-anticipated "I HAVE A MIRAGE" speech (you gotta see that hotel to believe it!)'...snip...

Accompanied by the sounds of snoring in the background...

'Most Arabs don't understand how Bush can expect to coax them into some sort of an anti-Iran alliance when our National Intelligence Estimate on Iran -- widely disseminated throughout the Arab world -- appeared to discredit Iran as a nuclear threat'...snip...

And the best line of all...'It will take a new president with the credibility of not being this president, to restore some faith and confidence in America's word in the Middle East'...snip...

Gotta file that one away for future use :)


A new president will be on the demerit system. His score can only go down. Best strategy: hands off.

Well, it appears that Bush is in the process of offering the Saudis a $30 billion arms deal. I guess so that they can continue to pretend to be friends of the US. Bush is also increasing the arms aid to Israel by several billion.

I suppose this is going to increase security in the Middle East ..... sell the same amount of military hardware to the opposing sides so as to keep things in equilibrium? Great concept!

The Bush regime has dead aim ....... for shooting itself in the foot!

This story made our local news. It might be of interest to some folks here.

"RED WING, Minn. - Workers at the Prairie Island nuclear plant were put on high alert temporarily on Sunday after a man blew up a dump truck about a mile away, authorities said.

According to Goodhue County Sheriff Dean Albers, a Welch Township man used explosives he had ordered through the mail to blow up the truck on his property. "It was quite an explosion," Albers said.

The man handed over a videotape of the blast, Albers said. As of Sunday night, he had not been arrested or charged with a crime. No one was injured.

Albers didn't know what kind of explosives the man used but said the blast was heard and felt more than a mile away at the Prairie Island nuclear plant. "


I'm not sure why the guy wanted to blow up his truck. I'm sure that it gave the Prairie Island power plant employees a moment to ponder when they heard the blast.

explosives he had ordered through the mail

WTF? Does anyone have a link to the mailorder company? (j/k)

You can order explosives? I'm sorry, the HSN has to cease these activities immediately. Any terrorist awake at 2AM might order some for something more dastardly.

Why does any guy need a reason to blow something up? Because it's there! Boys need their (explosive) toys.

It's a more entertaining form of gas guzzler / car crusher program.

After I posted my peak oil index on Friday, several people suggested I invert it so that a more serious peak oil problem gave a higher number rather than a lower number. I agree that this would be better, so here it is updated.

The index now uses an inverse of all U.S. petroleum products in terms of days of supply, multiplied by price. Price is adjusted for inflation and all figures use a 12 month average. The nice thing about this index is that it is a way of combining, price, supply, and consumption all in one number.

The index is now at an all-time high of 12.28, up from the January figure of 11.76. The reason for the sharp increase is that price is much higher this January than last, and supply is lower. I have figures going back to 1971, but the graph only shows the index from 2000:

This is a great idea and a very helpful chart. Thank you.

Finally a resolution of the Kashagan mess. It appears to be evidence that Kazakhstan at least for now is not going the way of Russia and Venezuela.
Kazakhstan denies it, but I still think that the next two large fields in the country -- Tengiz and Karachaganak -- are next.

Steve LeVine
The Oil and the Glory

For those interested in the top post:

"How to handle carbon dioxide? Lock it in rock"

A more regional discussion from last October is here:


" And because the economics of energy and sequestration discourage long-range transport of CO2, the Columbia Plain may wind up hosting many new coal-fired power plants, sited there specifically to be close to sequestration opportunities. Once again, it seems, the Northwest's massive intermountain desert may become the waste receptacle for interests beyond its borders. On the other hand, assuming the unintended consequences of basalt sequestration remain minor, the region is likely to benefit from the resulting jobs and economic growth."

"It will take about three years to get an idea of how well McGrail's lab tests and calculations have predicted the behavior of CO2 in basalt under real-world conditions. If things go well, perhaps basalt's poor-relation status will change, and its main champion will go down in history as the "Holy McGrail" of carbon sequestration."

i wonder how much co2 can be sequestered in all the basalt in the colombia river basin. just speculating, but.... hanford....doe......taxpayer funding.....i think i smell a boondoggle.

Great article on financialsense today by Joe Dancy-somehow I can't link it. He has a World GDP (PPP)/energy content from fossil fuels chart that is pretty good and he discusses the flaws in USGS estimates.

I think I posted it up top this morning. Is it this one?

Yeah, I missed it. That first chart is pretty scary.

Hello TODers,

I sure hope everyone is buying a wheelbarrow and bicycle for each family member. I have yet to read of any legislative proposals for Strategic Reserves of these items.

Survival of the Fittest: Pushing Wheelbarrows to Live

...He doesn’t have the luxury to attend school. For the past six years, he has worked pushing heavy loads for at least 12 hours each day, every day of the week.

Mehrenburg’s day begins at 5 a.m. That is when he rents his wheelbarrow for 10 000 cedis ($1 US) and begins work immediately, pushing goods within the camp in order to make money to survive.
If the postPeak US is suddenly caught short of these vital tools to leverage human effort: the machete' moshpits will be something awful.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Came across this on Flickr and got the linking code from the photographer - community wheelbarrows on a Norwegian island that has banned cars. Thought you'd like it for your files ...

At the ferry. Wheelbarrows.

Yep, I had already seen where you had posted this earlier, but thxs again. I think having these tools plentiful would be wise for any community that suddenly had a Black Swan Event. For example: a major earthquake & tsunami hitting the Seattle area--instantly using these tools to move the injured out of the multiple square miles of muck, mire, and fire. Clearing a narrow wheelbarrow path takes a fraction of the time compared to clearing a path for fire trucks and rescue vehicles. Recall the pictures of Galveston, then imagine trying to quickly move the injured to safe ground.

Lastly, my condolences to the family of Bob Ebersole.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

RE: Strahan's prediction of $400 oil.

I wonder if it would be better to talk about $15 gasoline. The public doesn't buy oil in barrels. Strahan, of course, may be aiming at a different audience.

Maybe Oily Cassandra should preach about $10 gas by 2010.

Not that I think it's necessarily coming that quickly, but that wouldn't stop Oily.

$10 gas by 2010

Actually not out of the realm of possibilities, but more likely UNAVAILABLE in sufficient quantities by 2010.

Come one.. that is only two years from now. Even with the worst case depletion scenario this will not happen!

2010 is two to 2.96 years from now.

Yes, $10/gallon gasoline is certainly possible by 2010, and has a distinct probability (say 10%). 2011 & 2012 are much more probable IMO.

The Millennium Institute T21 model, using Colin Campbell's oil predictions, has oil at $350/barrel in 2011 and the economy "cracks", GDP falls 5%, oil demand drops as does the price to about $200/barrel. It then climbs back up from there as the GDP rebounds slightly.

Please note that Robert Rapier was willing to bet $1000 against $100 oil in 2007, but not against $200 oil in 2010.

Best Hopes for STARTING Mitigation,


I continue to operate under the assumption that denial and BAU will be impossible after 2012. By 2012, the fat lady will have sung (or, more to the point, the Big Fat Idiot on the radio will have shut up), and it will be obvious beyond all dispute to all that we have ONE BIG PROBLEM with energy.

I cannot imagine a US without gasoline rationing after 2012, for example. Once rationing is introduced, gasoline prices become difficult to forecast, because that introduces a considerable and unknowable discontinuity into the system.


Gazprom expands gas supplies to Turkey

MOSCOW, January 14 (RIA Novosti) - Gazprom [RTS: GAZP] increased daily natural gas deliveries to Turkey by 2 million cubic meters to 40 million cubic meters along the Blue Stream pipeline from Monday, the Russian natural gas monopoly said.

Blue Stream, with a total length of 1,213 kilometers (754 miles), carries gas directly from Russia to Turkey across the Black Sea seabed.


Interesting how Russia managed to engineer Turkey to purchase the additional 2 mcm/day + 90 mcm above the initial 8 mcm/day. Surely the Turks must be lying that weather had something to do with this obvious Russian conspiracy to rule the world.

Greenland opens to oil firms; melting ice unlocks reserves

I think there's something uniquely awful yet transfixing about this story -- it's quite perverse, really. Digging oil up out of the ground -> causes global warming -> melts ice -> lets you dig up more oil.

It seems, though, that no oil company could simultaneously deny / downplay / dismiss AGW and pump this newly accessible oil.

Although it will be interesting to see them try.

Yes, rather like the melting of the Arctic ice will open up new fishing grounds for us to deplete.
It seems that every disaster can create a business opportunity
for someone.
Two graphic examples of exactly why the human race needs a drastic
and rapid culling.

It seems that every disaster can create a business opportunity
for someone.

Any day now I expect to see a new book: "You Can Profit From The Coming Great Extinction"